Prudential Regulation Authority Statement on liquidity

Mark Carney, Governor of the Bank of England, confirmed that the PRA Board will implement the June 2013 recommendation of the Financial Policy Committee regarding the amount of liquidity held by banks and building societies.
Published on 28 August 2013

Governor Carney said: "for major banks and building societies meeting the minimum 7% capital threshold, the Bank of England will reduce the level of required liquid asset holdings. The effect will be to lower total required holdings by £90 billion, once all eight major banks and building societies meet the capital threshold. That will help to underpin the supply of credit, since every pound currently held in liquid assets is a pound that could be lent to the real economy."

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